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Press release from CNW Group

Canam Group Posts a Third Quarter Net Income of $6.5M

Thursday, October 25, 2012

Canam Group Posts a Third Quarter Net Income of $6.5M07:00 EDT Thursday, October 25, 2012BOUCHERVILLE, QC, Oct. 25, 2012 /CNW Telbec/ - Construction products fabricator Canam Group Inc. (TSX: CAM) today announced a net income of $6.5M, or $0.15 per share, for the third quarter of 2012, compared with a net income of $9.7M, or $0.22 per share, for the same quarter in 2011. The 2011 results included the proceeds of $9.9M from an insurance policy. Consolidated revenues totaled $226.9M as compared to $225.6M for the year-earlier quarter.The increase in results in the third quarter of 2012 compared to 2011 excluding the proceeds from an insurance policy, is mainly attributable to the rise in joist and steel deck sales in Canada and the United States combined with improved profit margins in joist, steel deck and bridge activities.For the first nine months of 2012, net income totaled $9.6M, or $0.23 per share, compared with a net loss of $35.8M, or $0.79 per share, for the corresponding period in 2011. Consolidated sales for the first nine months of the year increased by 12.1%, from $594.7M in 2011 to $666.9M in 2012.As at September 29, 2012, the backlog of orders stood at $498M compared to $503M as at June 30, 2012.Financial managementPresident and Chief Executive Officer Marc Dutil confirmed the appointment of René Guizzetti to the position of Vice President and Chief Financial Officer. Mr. Guizzetti had held this position in the interim since last August in addition to his duties as Vice President, Corporate Control and Taxation.About Canam Group Inc.Canam Group is a manufacturing company that operates 20 plants across North America. Specialized in designing construction solutions and fabricating customized products since 1961, Canam Group takes part in an average of 10,000 construction projects each year in three activity sectors: buildings, structural steel and bridges. The Corporation employs close to 3,500 people in Canada, the United States, Romania, India and China.Conference callCanam Group will hold a conference call with financial analysts and media representatives on Thursday, October 25, 2012 at 9 a.m. A podcast will be available at www.canamgroup.ws and www.cnw.ca. A replay of the conference call will be available until November 8, 2012 by dialing 1-800-408-3053 and entering access code 3303467, followed by the pound key (#).CONDENSED INTERIM CONSOLIDATED STATEMENTS OF INCOME (LOSS)Periods ended September 29, 2012 and September 24, 2011(in thousands of Canadian dollars, except per share amounts) Three months  Nine months(unaudited) 2012 2011  2012 2011Revenues$226,894$225,599 $666,929$594,709Cost of sales, excluding depreciation and amortization (1) 190,630 199,728  573,522 573,624Selling and administrative expenses 18,859 18,461  59,877 62,308Profit sharing program 802 6  1,160 225Depreciation of property, plant and equipment 5,138 5,110  15,690 15,117Amortization of intangible assets 384 360  1,092 1,627Other losses (gains) — net 229 (11,414)  (4,455) (11,566)  10,852 13,348  20,043 (46,626)Finance costs 4,070 5,147  12,847 13,478Finance revenue (352) (657)  (1,761) (1,459)Impairment of goodwill - - 8,980  - - 8,980Gain on revaluation of balances of purchase price of businesses - - (9,127)  - - (9,127)Share of loss (income) of joint ventures and associates 72 (219)  (348) (457)Income (loss) before income tax 7,062 9,224  9,305 (58,041)Tax expense (income)          Current (recovered) 1,721 1,130  3,332 (14,293) Deferred (1,131) (1,648)  (3,676) (7,952)  590 (518)  (344) (22,245)Net income (loss)$6,472$9,742 $9,649$(35,796)          Net earnings (loss) per share          Basic$0.15$0.22 $0.23$(0.79) Diluted$0.15$0.21 $0.23$(0.79)          Weighted average number of common shares (in thousands of shares)          Basic 42,013 45,301  42,737 45,303 Diluted 42,096 45,357  42,820 45,369Number of common shares outstanding (in thousands of shares)      42,079 45,352(1)As at September 29, 2012 and September 24, 2011, the cost of sales, including depreciation and amortization, totaled $195,042 and $204,094, respectively, for the three-month period, and $586,913 and $586,637, respectively, for the nine-month period.CONDENSED INTERIM CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)Periods ended September 29, 2012 and September 24, 2011(in thousands of Canadian dollars) Three months  Nine months(unaudited) 2012 2011  2012 2011Net income (loss)$6,472$9,742 $9,649$(35,796)Other comprehensive income (loss):          Change in unrealized gains (losses) on translating foreign operations (8,588) 8,700  (8,912) 7,970Available-for-sale assets:          Unrealized gains (losses) on available-for-sale assets arising during the period 16 (155)  63 (40) Reclassified to statements of income (loss) - - - -  (274) - - Tax income (expense) (1) 20  28 5  15 (135)  (183) (35)Other comprehensive income (loss) (8,573) 8,565  (9,095) 7,935Comprehensive income (loss)$(2,101)$18,307 $554$(27,861)CONDENSED INTERIM CONSOLIDATED BALANCE SHEETS(in thousands of Canadian dollars)(unaudited) As atSeptember 29,2012  As atDecember 31,2011Assets     Current assets     Cash and cash equivalents$7,487 $7,368Accounts receivable 281,728  304,551Inventories 102,346  111,955Recoverable tax assets 342  16,588Prepaid expenses and other assets 3,673  4,063  395,576  444,525Property, plant and equipment classified as held for sale 1,449  1,498  397,025  446,023Non-current assets     Investments 6,182  4,959Ownership interests in joint ventures and associates 56,574  61,954Property, plant and equipment 263,346  279,554Intangible assets 9,414  9,772Goodwill 37,641  38,930Deferred tax assets 7,538  4,472Long-term receivables and other assets 20,601  21,820Total assets$798,321 $867,484Liabilities     Current liabilities     Bank loans$- - $32,761Accounts payable and accrued liabilities 158,626  169,110Current tax liabilities 1,083  165Current portion of long-term debt 10,063  37,038Current portion of balances of purchase price of businesses 9,134  7,315  178,906  246,389Non-current liabilities     Debt 179,267  163,782Balances of purchase price of businesses - -  8,768Convertible debentures 63,024  61,816Provisions 1,635  1,613Deferred tax liabilities 7,445  8,107Other liabilities 13,394  16,242Total liabilities 443,671  506,717Equity     Share capital 168,529  172,869Retained earnings 193,082  184,774Other equity items (6,961)  3,124Total equity 354,650  360,767Total equity and liabilities$798,321 $867,484CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY(in thousands of Canadian dollars) (unaudited)Employeebenefits paidin equityinstrumentsExchangedifferencesresulting fromthe translationof foreignoperationsAvailable-for-sale financialassetsDebentureconversionoptionsTotal otherequity itemsShare capitalRetainedearningsTotalequityBalance as at January 1, 2011$4,035$(11,133)$798$5,764$(536)$179,102$222,877$401,443Net loss for the period - - - - - - - - - - - - (35,796) (35,796)Comprehensive income - - 7,970 (35) - - 7,935 - - - - 7,935Dividends - - - - - - - - - - - - (3,592) (3,592)Issuance of shares pursuant to options (13) - - - - - - (13) 57 - - 44Shares acquired by employees (1,810) - - - - - - (1,810) 1,810 - - - -Repurchase of shares - - - - - - - - - - (86) - - (86)Excess of acquisition cost over carrying amount of acquired common shares - - - - - - - - - - - - (70) (70)Amortization of compensation costs related to the profit sharing program - stock ownership component 560 - - - - - - 560 - - - - 560Balance as at September 24, 2011$2,772$(3,163)$763$5,764$6,136$180,883$183,419$370,438Balance as at January 1, 2012$2,928$(6,408)$840$5,764$3,124$172,869$184,774$360,767Net income for the period - - - - - - - - - - - - 9,649 9,649Comprehensive loss - - (8,912) (183) - - (9,095) - - - - (9,095)Shares acquired by employees (1,160) - - - - - - (1,160) 1,160 - - - -Repurchase of shares - - - - - - - - - - (5,500) - - (5,500)Excess of acquisition cost over carrying amount of acquired common shares - - - - - - - - - - - - (1,341) (1,341)Amortization of compensation costs related to the profit sharing program - stock ownership component 170 - - - - - - 170 - - - - 170Balance as at September 29, 2012$1,938$(15,320)$657$5,764$(6,961)$168,529$193,082$354,650CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWSPeriods ended September 29, 2012 and September 24, 2011(in thousands of Canadian dollars) Three months  Nine months(unaudited) 2012 2011  2012 2011Cash flows from the following activities:         Operating activities         Net income (loss)$6,472$9,742 $9,649$(35,796)Adjustments:          Amortization of compensation costs related to the profit sharing program - stock ownership component 57 187  170 560 Impairment of goodwill - - 8,980  - - 8,980 Gain on revaluation of balances of purchase price of businesses - - (9,127)  - - (9,127) Gain on disposal of investments - - - -  (2,361) - - Gain on disposal of property, plant and equipment (19) (9)  (24) (230) Depreciation of property, plant and equipment 5,138 5,110  15,690 15,117 Amortization of intangible assets 384 360  1,092 1,627 Amortization of deferred financing expenses 74 123  196 367 Provisions 106 75  22 87 Interest rate swaps 11 352  47 543 Imputed interest 564 837  1,780 2,508 Pension expense (641) 184  (2,241) 383 Deferred tax expense (1,131) (1,648)  (3,676) (7,952) Share of loss (income) of joint ventures and associates 72 (219)  (348) (457)  11,087 14,947  19,996 (23,390)Net change in non-cash operating working capital items         Decrease in the investment pledged as collateral - - 7,721  - - 7,721Decrease (increase) in accounts receivable 1,888 (3,679)  19,997 (29,083)Decrease (increase) in inventories (4,413) (11,031)  7,706 (25,826)Decrease (increase) in current tax assets 1,703 756  16,237 (10,722)Decrease in prepaid expenses and other assets 167 209  318 227Increase (decrease) in accounts payable and accrued liabilities (3,097) 6,976  (6,519) 26,240Decrease in provisions - - (7,691)  - - (3,760)Increase (decrease) in interest payable (150) 1,223  (160) 1,220Increase (decrease) in current tax liabilities 860 (23)  924 92  (3,042) (5,539)  38,503 (33,891)Cash flows from operating activities 8,045 9,408  58,499 (57,281)Financing activities         Repurchase of shares (129) - -  (6,841) (156)Proceeds from issuance of shares - - - -  - - 44Dividends - - (1,796)  - - (3,592)Increase in debt and bank loans 4,372 16,287  4,951 107,586Repayment of debt and bank loans (7,347) (10,777)  (47,328) (15,081)Repayment of balances of purchase price of businesses (245) (121)  (6,929) (7,177)Issue expenses related to debt and debenture (257) (74)  (257) (842)Other liabilities 8 (164)  63 (570)Cash flows from financing activities (3,598) 3,355  (56,341) 80,212Investing activities         Proceeds from sale of property, plant and equipment 221 14  234 80Additions to property, plant and equipment (2,745) (3,495)  (5,243) (14,810)Additions to intangible assets (808) (39)  (899) (345)Acquisition of investments (149) - -  (2,769) - -Proceeds from disposal of investments - - - -  5,172 - -Distribution received from a joint venture - - 225  265 225Decrease in receivables and other assets 1,198 590  2,294 752Increase in receivables and other assets - - - -  - - (52)Cash flows from investing activities (2,283) (2,705)  (946) (14,150)Effects of changes in foreign exchange rate on cash and cash equivalents (693) (54)  (1,093) 189Net change in cash 1,471 10,004  119 8,970          Cash and cash equivalents - Beginning of period 6,016 7,496  7,368 8,530Cash and cash equivalents - End of period$7,487$17,500 $7,487$17,500Supplementary information          Interest paid$1,367$2,084 $5,823$6,018 Income taxes paid (recovered), net$(641)$184 $(13,606)$(2,937)  SOURCE: CANAM GROUP INC.For further information: François Bégin Vice President, Communications Canam Group Inc. 450-641-4000 francois.begin@canamgroup.ws